This refers to the Nuclear Regulatory Commission
(NRC) special inspection conducted on November 29-30, 2000, at your Dorado,
Puerto Rico facility. The purpose of the inspection was to followup on
an event that occurred during a radiography source exchange on November
24, 2000. The results of the inspection, including five apparent violations,
were discussed with members of your staff on November 30 and December
13, 2000, and formally transmitted to you by letter dated January 5, 2001.
Based on the results of the inspection, an open predecisional enforcement
conference was conducted at the NRC's Region II office in Atlanta, Georgia,
on January 18, 2001, to discuss the apparent violations, the root causes,
and your corrective actions. A listing of conference attendees and the
materials NRC presented at the conference are enclosed.

Based on the information developed during
the inspection and the information that you presented at the conference,
the NRC has determined that five violations of NRC requirements occurred.
The violations are cited in the enclosed Notice of Violation (Notice),
and the circumstances surrounding them are described in detail in the
subject inspection report. As the Notice indicates, the violations were
separated into two parts. The four violations cited in Part (A) occurred
prior to and during the source exchange, while the one violation cited
in Part (B) of the Notice involved the emergency procedure that should
have been followed after it was discovered that the source had not reached
its fully shielded position.

The violations are: (A.1) failure to perform
proper surveys, as required by 10 CFR 20.1501; (A.2) failure to follow
the manufacturer's instructions while changing a source, as required by
Condition 18 of License No. 52-25461-01 and Item 6.11.b of the application;
(A.3) failure to provide instructions to the Radiation Safety Officer
(RSO) and a radiographer on the proper use of a source changer prior to
its use, as required by Condition 18 of License No. 52-25461-01; (A.4)
failure to perform a visual and operability check of the source changer
prior to its use, as required by 10 CFR 34.31(a); and (B) failure of the
RSO and radiographer to immediately withdraw from the area in response
to a sounding alarm rate meter, as required by Item 6.12.a of the application.
As discussed at the conference, the root and contributing causes of the
event included inadequate training provided to the RSO and radiographer
on the use of the new source changer, the RSO's and radiographer's overconfidence
in their ability to use the new source changer due in part to their believed
familiarity with the equipment and their assumption that changing the
source, even with a new model changer, would be a routine operation, the
failure to perform proper surveys, and the failure of the individuals
involved to fully understand and implement emergency procedures after
they became aware that the source had not been safely transferred during
the source exchange.

The violations that occurred before and
during the source exchange represent the failure of multiple barriers
which are specifically in place to preclude events such as the one that
occurred in November 2000. In addition to our concern regarding the violations
which occurred before and during the source exchange, the failure of the
RSO and radiographer to withdraw from the area and to assess the situation
prior to attempting to rectify the unshielded 6.7 curie Iridium-192 source
is of particular concern to us. This error resulted in a doubling of the
dose to the radiographer and unnecessary exposure to the RSO, and demonstrated
a lack of forethought and preparation regarding the implementation of
emergency procedures. Such procedures are integral to the safe handling
of licensed by-product material. In this case, the actual dose received
by these two individuals involved in the source exchange was less than
NRC regulatory limits. However, these individuals received unnecessary
radiation exposure, and a substantial potential existed for radiation
dose in excess of prescribed limits. The failure to perform adequate surveys
alone could be characterized as a Severity Level III violation, in accordance
with the "General Statement of Policy and Procedures for NRC Enforcement
Actions - May 1, 2000" (Enforcement Policy), NUREG-1600, as amended on
November 3, 2000 (65 Federal Register 59274). We have concluded,
however, that based on the relationship of the four Part (A) violations
in contributing to the event, Violations (A.1-4) have been categorized
collectively as a Severity Level III problem. The violation in Part (B)
has been categorized separately as a Severity Level III violation, based
on our conclusion that this violation in itself resulted in a substantial
potential for radiation dose in excess of prescribed limits.

In accordance with the Enforcement Policy,
a base civil penalty in the amount of $6,000 is considered for each Severity
Level III violation or problem occurring on or after November 4, 2000.
Because your company has not been the subject of escalated enforcement
action within the last two inspections, the NRC considered whether credit
was warranted for Corrective Action
in accordance with the civil penalty assessment process described in Section
VI.C.2 of the Enforcement Policy. Your corrective actions were detailed
in your December 19, 2000, event report and during the conference, and
included in part: (1) immediate actions to secure the source and determine
the extent of radiation dose received by the individuals involved in the
event; (2) the conduct of refresher training to all radiographers in the
proper performance of a source exchange for the type and model used during
the event; (3) the conduct of radiographer training with emphasis on the
importance of conducting appropriate radiation surveys; (4) your plans
for all future radiographers to receive training in the use of source
exchange equipment and the importance of conducting surveys; (5) discussions
between the RSO and Corporate RSO on this event, lessons learned, and
activities necessary to preclude and manage similar incidents in the future;
(6) the conduct of periodic meetings (via teleconference) between Corporate
management and individuals involved in radiography throughout the company
to discuss this event and other industry events as necessary; (7) Law
Engineering's intent to conduct independent quarterly audits/reviews of
activities at the Puerto Rico office. Based on the above, NRC concluded
that your actions were prompt and comprehensive, and credit was warranted
for the factor of Corrective Action.

Therefore, to encourage prompt and comprehensive
correction of violations and in recognition of the absence of previous
escalated enforcement action, I have been authorized to propose that no
civil penalty be assessed in this case. However, similar violations in
the future could result in further escalated enforcement action. In addition,
issuance of this Notice constitutes escalated enforcement action that
may subject you to increased inspection effort.

The NRC has concluded that information regarding
the reason for the violation, the corrective actions taken and planned
to correct the violation and prevent recurrence, and the date when full
compliance was achieved is already adequately addressed on the docket
in this letter and in Law Engineering's report of the incident dated December
19, 2000. Therefore, you are not required to respond to this letter unless
the description herein does not accurately reflect your corrective actions
or your position. In that case, or if you choose to provide additional
information, you should follow the instructions specified in the enclosed
Notice.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy
of this letter, its enclosure, and your response, should you provide one,
will be made available electronically for public inspection in the NRC
Public Document Room or from the Publicly Available Records (PARS) component
of NRC's document system (ADAMS). ADAMS is accessible from the NRC Web site at the Public NRC Library.

If you have any questions regarding this
matter, please contact Douglas M. Collins, Director, Division of Nuclear
Materials Safety, at 404-562-4700.

During an NRC inspection conducted on November
29-30, 2000, violations of NRC requirements were identified. In accordance
with the "General Statement of Policy and Procedures for NRC Enforcement
Actions - May 1, 2000," NUREG-1600, as amended on November 3, 2000 (65
Federal Register 59274), the violations are listed below:

A.

(1)

10 CFR 20.1501 requires
that each licensee make, or cause to be made, surveys that may be
necessary for the licensee to comply with the regulations in Part
20 and that are reasonable under the circumstances to evaluate the
extent of radiation levels, concentrations or quantities of radioactive
materials, and the potential radiological hazards that could be present.

Pursuant
to 10 CFR 20.1003, survey means an evaluation of the radiological
conditions and potential hazards incident to the production, use,
transfer, release, disposal, or presence of radioactive material or
other sources of radiation.

Contrary to the above, on November 24, 2000, a licensee radiographer
failed to perform the proper surveys to assure compliance with 10
CFR 20.1201(a), which limits occupational exposure to the extremities
and the whole body. Specifically, the radiographer failed to perform
an adequate radiation survey which would have revealed that a 6.7 curie
iridium-192 sealed source was not in the proper shielded position
and could have caused an overexposure of the extremities and whole
body. The survey meter used during the activity was located behind
the radiographer and was not in a position to measure the radiation
levels to which the radiographer was exposed. In addition, the alarming
ratemeter worn by the radiographer was shielded by his body and not
capable of detecting the radiological hazard present. (01013)

(2)

Condition 18 of License No. 52-25461-01
requires, in part, that the licensee conduct its program in accordance
with the procedures contained in the license application dated December
31, 1998.

Item 6.11.b of the application (Source Exchange Procedures) requires
that the manufacturer's attached instructions for each model source
changer be followed explicitly during the source exchange.

Contrary to the above, on November 24, 2000, the radiographer failed
to open a newly added lock on the source changer as specified in the
manufacturer's instructions. This prevented the source from entering
the source changer, which stayed in an exposed position in the immediate
vicinity of the radiographer. (01023)

(3)

Condition 18 of License No. 52-25461-01
requires, in part, that the licensee conduct its program in accordance
with the procedures contained in the license application dated December
31, 1998. Item 8.4.e.2 of the application (Training) requires, in
part, that experienced radiographers hired by the licensee receive
instructions in the use of radiography equipment to the extent necessary
to supplement their previous training and experience.

Contrary to the above, as of November 24, 2000, the licensee's Radiation
Safety Officer (RSO) and a radiographer had not received any instructions
in the use of the model of the source changer prior to its use that
day. (01033)

(4)

10 CFR 34.31(a) requires the license
to perform a visual and operability check of source changers on the
day of use to ensure the source changer is in good working condition
and that the sources are adequately shielded.

Contrary to the above, on November 24, 2000, the radiographer failed
to perform the required visual and operability check prior to using
the source changer. (01043)

This is a Severity Level
III problem (Supplements IV and VI).

B.

Item 6.12.a of the application
(Emergency Procedures - Alarm Ratemeter Warning) requires that, at
any time the alarm ratemeter sounds, radiography personnel immediately
withdraw to an area where it is silent and read the survey meter.

Contrary to the above, on November 24, 2000, both the radiographer
and the RSO failed to stop, withdraw to a silent area, and confirm
being in the presence of low radiation levels when an alarm ratemeter
sounded. (02013)

This is a Severity Level III violation (Supplements
IV and VI).

The NRC has concluded that information regarding
the reason for the violations, the corrective actions taken and planned
to correct the violation and prevent recurrence, and the date when full
compliance was achieved is already adequately addressed on the docket
in the letter transmitting this Notice of Violation (Notice) and in Law
Engineering's report of the incident dated December 19, 2000. However,
you are required to submit a written statement or explanation pursuant
to 10 CFR 2.201 if the description therein does not accurately reflect
your corrective actions or your position. In that case, or if you choose
to respond, clearly mark your response as a "Reply to a Notice of Violation,"
and send it to the U.S. Nuclear Regulatory Commission, ATTN: Document
Control Desk, Washington, DC 20555 with a copy to the Regional Administrator,
Region II within 30 days of the date of the letter transmitting this Notice.

If you contest this enforcement action,
you should also provide a copy of your response, with the basis for your
denial, to the Director, Office of Enforcement, United States Nuclear
Regulatory Commission, Washington, DC 20555-0001.

Because any response will be made available electronically for public
inspection in the NRC Public Document Room or from the Publicly Available
Records (PARS) component of NRC's document system (ADAMS), to the extent
possible, it should not include any personal privacy, proprietary, or
safeguards information so that it can be made available to the public
without redaction. ADAMS is accessible from the NRC Web site at the Public NRC Library. If personal privacy or proprietary
information is necessary to provide an acceptable response, then please
provide a bracketed copy of your response that identifies the information
that should be protected and a redacted copy of your response that deletes
such information. If you request withholding of such material, you must
specifically identify the portions of your response that you seek to have
withheld and provide in detail the bases for your claim of withholding
(e.g., explain why the disclosure of information will create an unwarranted
invasion of personal privacy or provide the information required by 10
CFR 2.790(b) to support a request for withholding confidential commercial
or financial information). If safeguards information is necessary to provide
an acceptable response, please provide the level of protection described
in 10 CFR 73.21.

In accordance with 10 CFR 19.11, you may
be required to post this Notice within two working days.